All Entries Tagged With: "currencies"
Swiss National Bank Vows to Defend Exchange Rate
On Tuesday, the Swiss National Bank (SNB) opted to peg its currency to the euro. Vowing to use unlimited currency purchases, the SNB pledged to maintain the franc’s exchange rate against the euro above the value of 1.20 euros for every franc. The currencies had approached parity in recent months. The announcement sent a shockwave [...]
Eurozone Examines Two Nasty Options: Swap or Roll?
Ahead of the June 23-24 meeting of all 27 European Union members, the single currency portion of the EU is trying to reach an agreement on the second bailout package for Greece. Germany is supporting a proposal that would force Greece’s creditors to swap existing bonds for new bonds with a much longer maturity date. [...]
Euro No Longer Hostage to Greece?
Yesterday, ratings agency Standard & Poor’s cut Greek debt to the lowest possible rating: “CCC”. That’s three steps lower than the country’s previous “B” rating. Surprisingly, the EURUSD strengthened following the announcement, leading one to wonder what might be happening. First of all, S&P is the last of the three major rating services to issue [...]
China’s Banking Woes
Two recent articles published by Caixin Online point out different, but related problems facing Chinese banks. The first notes something that many have long suspected: China’s appreciating exchange rate has cost the country a lot of money – more than $2 trillion. The second article questions the value of assets held by China’s banks. The [...]
Dollar Stronger Due to Euro Debt Worries
Last week’s news that the euro core members were meeting to discuss Greece’s withdrawal from the single currency turned out to be false. That didn’t stop the euro’s slide, which dropped the EURUSD rate from 1.44 down to almost 1.40 in just a few days. Compared with the US dollar, the euro is now viewed [...]
Euro Falls on Possibility Greece Will Flee
In the past week, the EURUSD has fallen below 1.43 on rumors that Greece would leave the European Monetary Union. This is not the first time the notion has been floated, and just like those other times Greek and EU officials strongly deny that such a move is being contemplated. But its not the worst [...]
Chinese Trade Surplus Skyrockets, Yuan Inches Up
China’s trade balance for the month of April shot up to $11.4 billion dollars, far above the expected rise of between $1 billion and $3 billion. The jump has been attributed to a weaker-than-it-needs-to-be yuan. Chinese imports slowed in April, from year-over-year growth in March of 27.3% to 21.8%. Exports rose by 29.9% in April, [...]
New Caution in Commodities Trading
The killing of Osama bin Laden provided riveting political news, but its effect on the markets was decidedly less pointed. Silver prices fell about 13% on the news, but gained most of that back in less than 24 hours. Gold prices dipped too, but recovered even more quickly. The US dollar also strengthened on the [...]
More Sentiment for a Chinese Appreciation
US Federal Reserve chairman Ben Bernanke’s history-making press conference, following a meeting of the Fed’s open market committee last week, didn’t produce any surprises. The Fed plans to continue its QE2 program until its scheduled expiration at the end of June; core inflation is not yet a problem; and there is no interest rate hike [...]
Investing China’s Forex Reserves
The People’s Bank of China is considering the establishment of a new fund that would use the country’s $3 trillion in forex reserves to invest in something other than the dollar. One possibility being bandied about is that the country will use some of its reserves to purchase gold or silver or other commodities, reducing [...]
